Living Margin for Accounting

The living margin accounting framework is a simple, effective way to increase margin and see your cash flow steadily grow. It may even be the most revolutionary program for transforming how you guarantee financial margin in your business. 

You can use the system, designed specifically for business owners and professionals, to jump-start your business by putting the living margin formula into action. The living margin accounting system makes it quick and easy to turn a profit and, in the process, destroy debt for good as you control your cash flow. 

Like most people, there’s a good chance that you monitor the health of your business life by your bank account balance. But that vicious cycle keeps you second-guessing your decisions in search of that ever-elusive profit. 

You may show a paper profit but struggle to understand why the cash is not in the bank. In the Generally Accepted Accounting Principle (GAAP) formula, profit is marginalized as a leftover … or a pleasant surprise at the end of the year. The GAAP formula is logically accurate but does not account for small business owners and human behavior. 

So, how do we solve this cash-flow problem? It’s simple, really: with a little bit of math and a framework that flips the GAAP formula. With the living margin accounting framework, you take a predetermined percentage of revenue as owner compensation and another percentage for operating expenses to create an automatic living margin. 

This simple change is so powerful because you create a new framework that uses human behavior to dictate that when you are given more, you will allocate more. Alternatively, when given less, you will allocate less. This is important because you will allocate what you have and, in the process, go out of your way to find more innovative ways to operate your business. 

The living margin accounting system dictates that you pay yourself first, which forces you to operate your business more efficiently. Doing so intentionally creates a system for cash flow that can be repeated year after year.